Though Japan is known as one of the most technologically advanced countries in the world, it’s curiously still a cash-based society. The one exception is electronic money, which is stored in a tiny chip in a special card or one’s cell phone.

Bloomberg News

The logo of Seven & I Holdings Co. is displayed at a Seven-Eleven convenience store in Tokyo. The company introduced the Nanaco card in 2007.

The concept is pretty cool: one can make purchases by simply swiping their cell phone on an electronic reader. And it’s growing in popularity too. During the first half of 2010, the number of electronic money transactions swelled by 39% compared with the same period a year ago, according to the Nikkei newspaper.

Electronic money became popular around 2007, when two major retailers, Aeon Co., Ltd. and Seven & i Holdings Co., Ltd., started their own versions of electronic money. The transactions by Aeon and Seven & I account for roughly 50% of all transactions in Japan.

Retailers have promoted the use of their money by giving points to shoppers. For example, users of the Nanaco card, offered by Seven & i, earn 1 point for every 100 yen of shopping, which can later be used to pay at a rate of 1 yen per point. Read More »

About Japan Real Time

Japan Real Time is a newsy, concise guide to what works, what doesn’t and why in the one-time poster child for Asian development, as it struggles to keep pace with faster-growing neighbors while competing with Europe for Michelin-rated restaurants. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, the site provides an inside track on business, politics and lifestyle in Japan as it comes to terms with being overtaken by China as the world’s second-biggest economy. You can contact the editors at japanrealtime@wsj.com